So… Did this flipper add value?

[UCGal]

I noticed a recent flip just closed in my ‘hood.
I’m curious what the piggs think about this one…

Before listing:
http://www.sdlookup.com/MLS-110026523-3136_Carnegie_Pl_San_Diego_CA_92122
Definitely in rough shape. Flipper purchased for $435k.

It was a 2 month flip between close of the first listing, and listing it again. It went pending in 3 weeks.

The after listing.
http://www.sdlookup.com/MLS-110061254-3136_Carnegie_Pl_San_Diego_CA_92122

Looking at what they did:
– refaced the fireplace from painted brick to stacked stone.
– new floors in the living/dining room from bad carpet to hardwood or pergo.
– paint everywhere.
– reconfigured the kitchen substantially – moving the fridge and stove, closing the wall that led to the laundry.
– completely replaced at least one bathroom.
– new windows.
– new exterior paint.
– removed (or moved) chainlink from back of yard.
– can’t tell – but perhaps some grading on the side of the backyard… looks like that wall might be new.

[davelj]

Looks like they added a crapload of value to me. Doesn’t even look like the same house. My question is how much they made on the flip given the costs of renovation and commissions on sale… they only had $140K to work with and that renovation looks pretty involved. But I’m not good at eyeballing the cost of major renovations like this one.

[bearishgurl]

Premium lot. Appears to be a former longtime rental. Don’t know what the current comps are there but $575K (flipped) seems reasonable to me, given its premium canyon lot. The flippers seemed to have done all the right stuff to successfully market it for a quick sale, so yes, they DID add value!

The only question I have here is, “Was $140K `profit’ enough to cover all the materials, (very fast and efficient) labor, DIY labor (if any) and closing costs on both transactions?” I haven’t looked up “Fit Properties” on the DRE website but would surmise that the principal or one of the principals (or their relative) in this flip is the broker for “Fit Properties.” Otherwise, the selling commission would have been too high for them to make this flip pencil out (as opposed to paying only a co-broke fee).

Very nice “transformation.” Thanks for sharing, UCGal!

[bearishgurl]

[quote=davelj]Looks like they added a crapload of value to me. Doesn’t even look like the same house. My question is how much they made on the flip given the costs of renovation and commissions on sale… they only had $140K to work with and that renovation looks pretty involved. But I’m not good at eyeballing the cost of major renovations like this one.[/quote]

davelj, looks like we’re in (simultaneous) agreement on this one . . . lol.

I WAS good at “eyeballing” the cost of major renovations at one time but the stakes are higher now. For example, buyers today “expect” double-paned vinyl windows, granite, a convection oven and flooring throughout (instead of carpeting, which is generally easier and cheaper to install).

I’m uncertain that these flippers made a “lot of $$” unless they are licensed contractors who got the mat’ls at VERY deep discounts. They obviously had a VERY motivated, efficient and competent crew, which they obviously paid.

[ucodegen]

[quote=bearishgurl]I WAS good at “eyeballing” the cost of major renovations at one time but the stakes are higher now. For example, buyers today “expect” double-paned vinyl windows, granite, a convection oven and flooring throughout (instead of carpeting, which is generally easier and cheaper to install).

I’m uncertain that these flippers made a “lot of $$” unless they are licensed contractors who got the mat’ls at VERY deep discounts. They obviously had a VERY motivated, efficient and competent crew, which they obviously paid.[/quote]
Right now, contractors are scrambling for work, so the home owner – upgrader is in the drivers seat (for now). They did replace the windows.. I don’t know if they did all of them. It looks like the replacement windows are dual pane vinyl. The old ones were those aluminum frame single pane things. I am curious how they handled the shower that looked like it was leaking at its base. Looks almost like they closed off the far side and made it a large ‘alcove’ shower. The only bad thing that I can think of is that they removed the gutters that were over the doorway and garage. One rain and the new owners will want them there.

I suspect the purpose of the price is to start a ‘bidding war’. I think it is a little too early to do that, though that is a higher priced neighborhood. RE still has to find its legs. Definitely a lot of work in that fixup though. It is also nice that they kept that tree in the backyard. Too many flippers remove large trees.

[SD Realtor]

I would venture to say these flippers did well. Good crew and smal holding time usually equal success absent of major calamities.

[UCGal]

[quote=ucodegen]
I suspect the purpose of the price is to start a ‘bidding war’. I think it is a little too early to do that, though that is a higher priced neighborhood. RE still has to find its legs. Definitely a lot of work in that fixup though. It is also nice that they kept that tree in the backyard. Too many flippers remove large trees.[/quote]

They accepted the $575k price. That’s the sold price. Less than the asking price… The list price had been $599 per redfin.
http://www.redfin.com/CA/San-Diego/3136-Carnegie-Pl-92122/home/6234910

[CDMA ENG]

UCGal,

I dont know if you have noticed but there is a serial flipper in our mist…

He has flipped many UC properities and done an excellent job with all of them. Take a look at several properties on Villanova, two on Mercer (both) corner properties (one in progress and one just done), and another couple (or three) on Mercer lane… Overall he has been raising the property value of the whole area one house at a time and he is doing a damn good job.

I would actually like to know who this guy is so that I could follow a couple of his flips to see if I would be interested.

I would have pulled the trigger on the one at the corner of Mercer and Weselly for what he was asking…

I would say the flipper is a assest to the UC.

CE

[UCGal]

[quote=SD Realtor]I would venture to say these flippers did well. Good crew and smal holding time usually equal success absent of major calamities.[/quote]
My gut agrees with you. They managed their timeline well and probably made a decent profit on this, especially if they didn’t have to pay full sellers agent commision.

It looks like the flippers are realtors.
http://www.fitproperties.com/aboutus.aspx

It helps the neighborhood. I have friends who live near there (on the next pocket canyon over… with similar view). These houses are a mix of fully fixed up show houses, and original owner, 1960’s classics. (In other words – very outdated and need updating.)

[bearishgurl]

[quote=UCGal]. . . It looks like the flippers are realtors.
http://www.fitproperties.com/aboutus.aspx . . . [/quote]

Thanks for the link, UCGal. It appears that “Fit Properties” is in the biz of forming REITS and may have no shortage of potential individual investors for distressed and fixer-type potential “flips.”

I myself wouldn’t mind making $$ in this way (on a smaller scale, of course) – even getting my “hands dirty.” Or buying and holding for rental income. I think to be successful at it one has to have an intimate “feel” for their target investment areas’ potential buyers and tenants, including knowing exactly what they would pay to buy or rent the property upon completion of the fix-up work.

I think now is a GREAT time to be in this biz for those who have the capital, contacts and know-how 🙂

[SD Realtor]

I would agree with everything CDMA and UCGAL said.

UC when you have a good operation running and can feed your crew consistent work you would be surprised at how little the cost it. I would classify all the work they did as cosmetic as well. Maybe heavy cosmetic but cosmetic nonetheless. Running the flips through your own brokerage does help bigtime. Think about it, if these guys can make as little as 10% per home and flip 4 or 5 homes in a year at a price of 450k or around that (and I bet they do more) then they are doing pretty well.

That doesn’t even count whatever other business they are doing (other listings they may have through their brokerage).

[jstoesz]

Doublepane in sd what a waste. Give me wood, you can fix wood.

[DaCounselor]

Looks like maybe $50K of work. These guys probably made some good money on this one barring any serious non-cosmetic work. Nice job.

[DaCounselor]

Also re double-pane, actually a very good call and to be appreciated by the new owners if for no other reason than sound insulation. This house directly overlooks Regents and is also very close to the 52.

[SD Realtor]

Agreed DC, road noise travels right up those canyons especially at night.

[Author]

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